European Luxury Prada Prada Performance Decline In The End, Why?

Simple design and single sales channels can no longer match the pace of market change.

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In the earnings report, we can see that a "simple" brand is beginning to be squeezed out in China, and if there is no future change, there may be no future.

It is reported that Italy's old Prada (Prada) recently released its financial results, and the results showed that in the 2013 fiscal year ended January 31, 2014, Prada's net profit increased by only 0.3% over the same period last year, the worst result since its listing.

Insiders said that the global macroeconomic weakness made the European market of brand consumption subject to a certain degree of impact. At the same time, the relevant policies of the Chinese government also blocked the development of the brand in the domestic market.

In this regard, Zhou Ting, President of the Institute of wealth quality, held the opposite view. It said that the external economic environment would lead to relatively slow development of luxury goods, but the initiator of the decline in Prada performance was the internal injury of its brand.

From the point of view of product structure, most of the Prada sales are lack of freshness for their classic and basic funds, while consumers' ideas are changing, while brand and design remain the same, so it is difficult to attract consumers' attention.

It is understood that with the advent of the era of LOGO, many brands are beginning to break the classics, and continue to innovate in order to meet the needs of consumers.

Fendi (FENDI) and Gucci (GUCCI) have launched the products and series of weakening LOGO.

It is obvious for the brand to play a low profile and conform to the consumer psychology of shopping.

In turn, Prada has been stalled in design, and has been labeled by many high-end consumers with a lack of novelty.

Diversified development has become the buzzword of today's enterprises and brands. How to kill a blue ocean in the face of fierce competition? Many brands are based on the diversification strategy of products, markets and promotion.

LV Group vigorously develops the watch business, BV starts to plan the development of jewelry, fragrance and other categories, and the process of brand seeking to diversify is becoming more and more intense. However, Prada is just like a spectator.

It is learnt that on the road of diversified development, Britain

Burberry is a successful example. Children's clothing, home and bags involve multiple product lines in various fields, so that the brand can meet various needs of consumers.

At the same time, brands in the domestic electricity supplier channels have also done a good job, recently also set up customized services for Chinese consumers.

Consumers can choose and match their clothing materials and colors according to their own preferences.

For Burberry's diversified sales channels, Prada appears to be too conservative. In its earnings report, it mentioned 2014-2016 years of brand planning and 120 stores in the world.

In this regard, Zhou Ting analysis, a long established shop to promote performance is a regular strategy for luxury goods, many times will achieve remarkable results.

But in the face of the changing market, blind expansion may lead to tight financial services and ultimately short-term performance is just like a flash in the pan.

In October 2013, the echo newspaper wrote that luxury goods are the last romance in Europe. For a long time, many famous brands in the world such as London, Pakistan and Milan have made the luxury market strong. In the eyes of ordinary people, brand names are synonymous with luxury brands. The luxury goods swept across the mainland, especially the rise of emerging market countries, and promoted the consumption of luxury brands to European luxury brands.

According to Ipsos data, many Europeans are disappointed with luxury goods and the European economic crisis. Consumers feel that prices are rising, and the southern region is strongly affected by the financial crisis. Consumers in Spain, Italy and Portugal no longer buy luxury goods from Germany and Britain. European luxury goods have largely shifted to emerging market countries, pushing local brands and customers to start selling Arabic, Chinese and so on. Luxury leather prices have risen, and quality products have declined, and foreign tourists have become one of the sales targets, especially Asian countries.

The French echo newspaper reported that the European luxury market has been successful in emerging markets, and European brands account for 2/3 of global luxury exports. Many European industrial entities have been weak and unable to maintain market share since the European debt crisis, and luxury goods companies have been successful in their exports.

First, the strength of the brand, such as Louis Weedon, Hermes, Chanel, Gucci and so on, are all world famous brands, and second, emerging markets are the main consumers, according to a study by the Paris Institute of economics.

It is reported that in the past year, the European luxury market turnover exceeded 67%, while emerging market countries are one of the main consumers of luxury brands, such as Louis Weedon (LV).

This shows that the growth rate of luxury goods has declined, and the European market and the Chinese market have not been able to exert themselves. Luxury groups have to work hard to promote their products to emerging market countries.

According to consulting company Bain, from 1995 to 2015, the global luxury market will be multiplied by 5 over 25 billion. France has about 1 billion 700 million handbags, perfume, clothing, jewelry, leather, spirits, tableware and so on. France, Italy and Switzerland are major European luxury competitors.

Emerging market countries are one of the main export destinations.

At the same time, entering the emerging market is also facing challenges: as the consumption of luxury goods in the emerging market is growing, especially in some big European brands, the European luxury group will not hesitate to raise the price of high-end products in order to satisfy consumers' desire to buy luxury goods.